Entrée Gold (TSX:ETG) released an updated PEA for its Ann Mason copper-molybdenum porphyry deposit in Nevada: IRR of 15.8%, mine life of 21 years, development capital costs of approximately $1.35 billion, and an LOM average copper recovery of 92%.
Entrée Gold (TSX:ETG) released an updated Preliminary Economic Assessment for its Ann Mason copper-molybdenum porphyry deposit in Nevada. Highlights of the report include an internal rate of return of 15.8%, mine life of 21 years, development capital costs of approximately $1.35 billion, an LOM average copper recovery of 92%, and an average annual payable production of 241 million pounds of copper.
As quoted in the press release:
- Base Case* pre-tax NPV (7.5% discount rate) of $1,158 million, internal rate of return (“IRR”) of 15.8%.
- Base Case* post-tax NPV (7.5% discount rate) of $770 million, IRR of 13.7%.
- Development capital costs of approximately $1.35 billion, including $103 million contingency.
- Pre-production development of three years.
- Mine production for 21 years, followed by four years of reclamation (Life of Mine or “LOM”).
- Average LOM cash costs (net of by-product sales) pre-tax of $1.49/lb copper (cash cost including tax is $1.74/lb copper) (see Non-U.S. GAAP Performance Measurement below).
- Average LOM all-in sustaining costs (“AISC”) (net of by-product sales) pre-tax of $1.57/lb copper (AISC including tax is $1.81/lb copper) (see Non-U.S. GAAP Performance Measurement below).
- Net average pre-tax undiscounted cash flow over Years 1 to 21 of approximately $298 million per year (and post-tax of $238 million per year).
- LOM payable production of approximately:
- 5.1 billion pounds of copper,
- 46 million pounds of molybdenum,
- 0.4 million ounces of gold, and
- 8.8 million ounces of silver.
- Average annual payable production of approximately:
- 241 million pounds of copper,
- 2.2 million pounds of molybdenum,
- 20,000 ounces of gold, and
- 421,000 ounces of silver.
- Strip ratio of 2.01:1 waste to mineralized material (including pre-strip).
- LOM average copper recovery of 92%.
- Copper concentrate grading 30% with no penalty elements identified.
*Base Case uses $3.00/lb copper, $11/lb molybdenum, $1,200/oz gold, $20/oz silver.
The 2015 PEA is preliminary in nature and includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the 2015 PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The Base Case discounted cash flows in the 2015 PEA are provided both pre-tax and post-tax, and are prepared in compliance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) of the Canadian Securities Administrators. The 2015 PEA was completed by AGP Mining Consultants (“AGP”), an independent Canadian-based engineering firm and the updated mineral resource estimate was prepared by Amec Foster Wheeler Americas Limited (“Amec Foster Wheeler”). Unless otherwise noted, a reference to “$” in this news release is to United States currency. Due to rounding, some of the totals in the tables in this news release may not sum exactly.
Entrée Gold President & CEO, Greg Crowe, said:
“The 2015 PEA is a significant step forward for Entrée. It not only substantiates and enhances the results of the 2012 PEA, it also provides a solid foundation for advancing the Project to the next stages of development. The Ann Mason deposit is located within a historic copper mining district experiencing a resurgence of activity, in one of the most favourable mining jurisdictions in the world. In terms of project economics, access to infrastructure and desirable locations, the Ann Mason deposit is well situated to meet future demand for copper.”